Buzz over Zuckerberg's China visit

0 CommentsPrint E-mail Shanghai Daily, December 27, 2010
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Alibaba founder Jack Ma is often called "the Bill Gates of China," but on the weekend it was an even newer technology superstar engaging Ma's attention. A picture of him with visiting Facebook founder and Chief Executive Mark Zuckerberg was one of the hottest clicks online in China.

Before meeting Ma in Hangzhou, Zuckerberg, Time magazine's Man of the Year, met a string of Chinese industrial leaders in Beijing, including China Mobile Chairman Wang Jianzhou, Baidu founder and CEO Robin Li and Sina CEO Charles Chao.

The visit and the red carpet treatment during what was officially billed as just a "vacation in China," signals that Facebook has its sights set on China, where the netizen population is a third larger than the United States's population.

Facebook is currently not available in China, though Chinese versions of the popular site are proliferating here.

The industry buzz is all about some sort of cooperative agreement in the works between Facebook and the likes of China Mobile, Baidu or Sina.

In my opinion, Zuckerberg is unlikely to establish a joint venture or deep ties with any of the Internet-related giants in China because he doesn't need to. It's more likely that Facebook would look for partners among smaller, energetic players with solid local operating experience and resources in the location-based services (LBS) or tuan gou (group-buying) sectors.

Facebook, like other foreign services such as Twitter and YouTube, has been banned in China since 2008 without any official reasons. But the China market is hard to ignore when you are on the outside looking in.

At a talk earlier this year in California, Zuckerberg was quoted in the Wall Street Journal as saying he hoped to figure out the "right partnerships that we would need to do in China to succeed on our terms."

That's why his visit to China has been so widely watched.

Many Chinese firms have launched social networking services that have become quite successful, including, which is often called the Chinese Facebook, and Sina's Twitter-like services called Weibo or Microblog.

Zuckerberg must be keenly aware that many Western Internet companies, like eBay and Yahoo, have preformed poorly in China due to lack of understanding of the local culture and habits. Facebook would certainly have to consider carefully in finding the right Chinese partners and be well prepared for the domestic user restrictions and government regulations that govern players here. Then, too, Facebook would have to contend with all the domestic social networking sites that are already up and running.

Thanks to the success of Google and Apple, the latest hot business model is the platform and applications (app) approach. Under that model, a platform is started under the auspices of a large, well-known industry name. That attracts users. Third-party apps, from games, to socializing to business tools, keep users to the platform.

Every player in China, from China Mobile and Baidu to Tencent, is currently revising strategies to adopt that business model. For example, China Mobile has opened an online mobile app store called mobile market and Tencent is inviting app developers to design apps for its platform.

Facebook already has a platform with thousands of apps in overseas markets. It doesn't need a top-flight partner with a website reputation.

Before it was became inaccessible in 2008, Facebook had a considerable number of users in China, whose accounts are now in "sleep mode." Even today, a small but growing number of Chinese use tools such as virtual private networks to access Facebook.

I am sure that many people would go back to Facebook if it returned to China because it's a real international social platform.

Facebook may not need a high-profile partner to break into the China market, but it does need to find partners to launch localized apps. Because of cultural differences, it would be risky for Facebook to simply offer its US apps in China and expect success.

Obviously, Chinese netizens have their own approach to online shopping, LBS and instant messaging.

Take LBS, for example. It is an information and entertainment service accessible by mobile devices and utilizing the technology to determine the geographic position of the devices. For example, an LBS service can guide a mobile user to the nearest ATM or can be used by an advertiser to target potential customers in a particular area.

An LBS is a useful extension of a social networking system because it enables people to interact with other people or businesses with more precision and relevancy.

Facebook recently launched its own LBS offering, called Places, in the US. A successful LBS must attract lots of users and be useful at its core to succeed.

In China, it's only matter a time before the large Chinese social networking systems start to roll out their own versions, said Jeff Lin, senior vice president of LBS developer GyPSii in China.

Yang Yuancheng, co-founder of LBS developer Jiepang, also had his picture taken with Zuckerberg in Beijing, and it was posted online. Yang, however, failed to get the chance to sit down and really talk with the Facebook founder.

A company like Facebook would also have to understand popular phenomenon like tuan gou, or group shopping websites, in China. Those sites offer discounts when a large number of netizens agree to buy goods or services.

Zuckerberg is expected to visit Tencent, the country's No. 1 Internet firm by market value thanks to its instant message service QQ, in Shenzhen this week.

Why is he bothering to visit all these giant dot-coms if Facebook doesn't really need them to gain a foothold in China? Well, maybe the companies could teach the 26-year-old billionaire how to get government approval to operate a website in China.

Let's hope we see Facebook back in China someday!


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